The Government just announced new super changes
The Assistant Treasurer recently announced four key changes to our superannuation laws.
Given the spotlight placed on Australia’s super system during the Royal Commission hearings, it likely won’t surprise you to know the Morrison Government has plans for how it’s going to make changes to you and your clients’ super.
Speaking at a conference in Adelaide, Assistant Treasurer Stuart Robert said the Government “[respects] the fact that superannuation is both an integral part of the financial system and Australia’s retirement income system,” meaning any changes need to be “carefully considered and calibrated.”
Having said that, here’s what the Government is proposing:
A new “protecting your super” bill
Robert explained the Government’s Protecting Your Superannuation Package Bill” as protecting against “inefficiencies that result from Australians inadvertently holding multiple superannuation accounts.”
It will empower the ATO to reunite Australians with lost super and puts a cap on “certain fees that can be charged on small superannuation balances, and bans exit fees on all accounts.”
The bill will also change default insurance in super funds to an opt-in – meaning members will have to choose to participate in insurance cover when entering a new fund, rather than having it applied by default – for balances less than $6000, members under 25 and accounts that haven’t received a contribution for 13 months or more.
There is one exception to the above, and that’s if a member works in what’s determined to be a “dangerous occupation” such as the police force, truck driving, farming or concreting.
Checking in on member outcomes
Further changes come via the Superannuation Member Outcomes and Accountability Package, which will extend an “outcomes test” to choice super products as well as MySuper ones. On top of this, members will have to receive full disclosure about what’s in your super fund, regardless of type.
Other changes include empowering you to choose where your super goes – including into an SMSF – and giving the ATO real-time access to how much employers owe members.
Wrapping it up
There are other changes in regards to how the ATO can police the above, but the key takeout here is that we’re moving to a system where a lot of legacy fees are being eliminated, or at least becoming more tailored to individual circumstances.
The opinions expressed in this content are those of the author shown, and do not necessarily represent those of No More Practice Education Pty Ltd or its related entities. All content is intended for a professional financial adviser audience only and does not constitute financial advice. To view our full terms and conditions, click here.
